Fifth Ministerial Meeting of Southern Gas Corridor Advisory Council held in Baku President Ilham Aliyev attended the meeting

Baku, February 20, AZERTAC

The 5th Ministerial Meeting of the Southern Gas Corridor (SGC) Advisory Council has been held at the Heydar Aliyev Center in Baku.

President of the Republic of Azerbaijan Ilham Aliyev attended the meeting.

The participants in the event included energy ministers from the Southern Gas Corridor member-states and representatives of a number of organizations, as well as European Commissioner for Budget and Human Resources, acting co-chair of SGC Advisory Council Gunther Oettinger.

Prior to the meeting a joint photo was taken.

President Ilham Aliyev made a speech at the event.

Speech of President of the Republic of Azerbaijan Ilham Aliyev

Dear ladies and gentleman, dear guests, dear friends,

Welcome to Azerbaijan, I am very glad to see you and thank you for participating at the 5th Advisory Council of the Southern Gas Corridor. Back in 2015, we launched this important process. Azerbaijan initiated the idea of having such a format of cooperation. This was supported by the European Commission, and that is how it started. And now this is the benefits of these meetings, the benefits of broad discussions on what should be done in order to move forward this huge project. I would like to express gratitude to European Commission, for active involvement in the process, the European Commission and Azerbaijan are co-organizers of this Council and our close cooperation brings good results. It is a special pleasure to welcome Commissioner Oettinger who used to be a commissioner on energy and who played very important role in strengthening cooperation between the European Union and Azerbaijan on energy issues and in moving forward the project of the Southern Gas Corridor. It is really a team work, we work as a team and we see results, see progress year after year. I would like to express gratitude to the governments of the United States and the United Kingdom for their permanent support to all the energy projects which Azerbaijan initiated and particular for the support in implementation of the Southern Gas Corridor. I welcome the high representatives of the United States, the United Kingdom and I am sure that your contribution to the meeting will be outstanding. Also, I would like to greet high representatives of the countries involved in the implementation of the Southern Gas Corridor, our neighbors, Turkey, Georgia, European countries, Bulgaria, Greece, Albania, Italy. We are all now in one team of implementation of this project. As you know, Azerbaijan signed a Memorandum of Understanding with Bosnia and Herzegovina, Croatia, Montenegro on further expansion of energy development in Europe and building a modern, new infrastructure and network for diversification of energy supplies of Azerbaijan, and I welcome representatives of these countries. Also I am glad that a number of our guests, the countries which participate at annual Council also is growing. I was informed that we have representatives from Hungary, Romania, Serbia, San-Marino, Turkmenistan. I am glad that the number of countries which show interest in this project also is growing. And of course, the companies. Without the active participation of the companies it would not have been possible to implement this huge project. I would like to particularly mention close strategic cooperation between SOCAR and BP. BP is our strategic partner, strategic investor. It is a company which has been working in Azerbaijan for 25 years and which makes big efforts in order to support energy projects in Azerbaijan, and of course the investments from BP are highly welcomed. By the way, we are working on many important projects of energy development in Azerbaijan. Our joint efforts would not have been possible without close support from the international financial institutions. I would like to mention that I am glad that today among our guests we have representatives of leading international financial institutions, World Bank, IBRD, Asian Development Bank, European Investment Bank. And I would like to use this opportunity to express my gratitude for your financial contribution and your trust in us, trust in this project. So, mentioning this list of participants, already I think enough to imagine what kind of a huge initiative and project we are implementing. The Southern Gas Corridor is really a project of common interests, project of mutual importance. And it is part of Azerbaijan’s energy strategy which was launched back in 1994, when Azerbaijan signed an agreement with the Consortium of international oil companies on development of the huge oil field Azeri-Chirag-Gunashli. So that was the beginning of our close cooperation with international energy companies. That was a time when Azerbaijan opened its resources for international cooperation. For the first time, international investments came to the Caspian Sea, and 1994 was actually the turning point in the development of Azerbaijan, because at that time Azerbaijan was a newly independent country. Independence was less than three years, and economic situation in the country was very difficult. So, opening country for investments allowed us to attract multi-billion investments to create tens of thousands of jobs to present Azerbaijan as a country with the good investment climate and then to use benefits of oil and gas development the revenues to diversify economy to build modern infrastructure and now to concentrate mainly on non-energy sector. This is our priority but at the same time, energy sector, oil and gas sector in Azerbaijan will continue to be the leading sector of our economy and will continue to be one of the most important elements of regional cooperation. In 1996, the agreement contract on Shah Deniz gas field was signed. And Shah Deniz is a main resource base for the Southern Gas Corridor, I hope it will not be the only, but so far it is the only and the main resource base. It is a huge gas field which is already producing and exporting. If look at the chronology of our energy development, we see that step by step we were coming towards the main goal, to diversify our energy supplies and to build modern energy transportation infrastructure. Therefore, of course commissioning of the pipeline connecting Caspian Sea and the Black Sea in the end of 1990s, Baku-Supsa was important element of energy supply and diversification. Then came Baku-Tbilisi-Ceyhan that was a historical event. In 2006, this huge energy project was inaugurated that allowed companies to invest more, to extract more, and allowed us to export as much as we can. And today Baku-Tbilisi-Ceyhan also is transporting oil from other countries. So, Azerbaijan is already important transitor for oil supplies, and therefore, of course, the role of Azerbaijan in the region is growing. In 2007, Baku-Tbilisi-Erzurum gas pipeline was inaugurated, and for the first time Azerbaijan became gas exporter to international markets. Before that we were actually importing natural gas. So as I said, step by step we were coming towards the main energy projects which is the Southern Gas Corridor and implementation of the Southern Gas Corridor today is a reality. And I remember in 2012, Azerbaijan and Turkey signed an agreement on TANAP, which actually was a starting point for the Southern Gas Corridor. Because a year later, in 2013, the companies made an investment decision to develop Shah Deniz-2, second phase of Shah Deniz, and in 2013, Trans-Adriatic pipeline also was selected as the continuation of TANAP. So, all these demonstrates that we were working very closely with our partners, and really team work made it possible to talk about success. Since our last meeting last February there were two most important ceremonies, one in Azerbaijan, another in Turkey: May official opening of the Southern Gas Corridor, and June official opening of TANAP was really important milestone in the development of the Shah Deniz field and implementation of the Southern Gas Corridor project. And today we are very close to the completion of this huge energy project, three out of four elements of the Southern Gas Corridor are already in operation. We are glad that since opening TANAP has already transported more than one billion cubic meters of gas to the Turkish markets. So, TANAP is already in operation, and there is a big progress in implementation of TAP. I remember last February when I addressed the Council, I talked about the completion about 67 percent of TAP and now according to recent information it is already 85 percent. So, we really made a big progress within one year, and everything goes successfully. So, hopefully, next year we will talk about new results. Southern Gas Corridor project is a project of energy diversification, diversification of energy resources is very important for producers, for consumers, for transitors, and I think we found a very good balance between producers or producer Azerbaijan, transitors and consumers. And the balance of this interest make this project successful. Because we always were trying to understand the needs and concerns of each other. We always try and I think succeeded in supporting each other, and importance of this kind of meetings is really very very big. Because we review what has been done during one year, at the same time, we plan our future steps and then, during the year bilateral or multilateral consultations, meetings, conferences help to move forward. Southern Gas Corridor is a project of energy diversification also because its diversification of roots and sources. Azerbaijan is a new source for energy supply to Europe and of course, building the new pipeline or pipelines, we diversify the roots. Therefore, it is full diversification, and actually it is changing the energy map of Europe, and thus, the importance of the Southern Gas Corridor is growing. And of course, the Southern Gas Corridor is a project of energy security. Because we all understand that without energy security it is difficult to provide national security. So, energy security is integral part of the country’s national security. And the countries which depend on external energy supplies of course, they need to be sure that the supplies will be sustainable, and long-term. So that they can plan their future, the industrial development. At the same time, the countries which produce and which are rich with energy resources without reliable markets, they cannot achieve their goal. Therefore, it is a project of energy security, energy diversification, energy cooperation and broad international cooperation. Therefore, today’s format of the meeting really demonstrates that we managed to establish very broad format of international cooperation, financial institutions, companies, countries and all of us have the same goal. And all of us believe in implementation of the project, and we believe that it will be long-term success story for all of us. As far as Azerbaijan’s gas reserves are concerned, proven reserves are at the level of 2.6 trillion of cubic meters. Of course Shah Deniz is a main gas reservoir of Azerbaijan, but at the same time, there are other fields, which are now in the process of exploration, and soon I think we will have good results from Absheron field. I am sure that in the nearest future we will start to extract gas from there, and also, very promising field is Umid-Babak, which also has a huge gas potential and other fields. Therefore, I am sure that Shah Deniz will not be the only resource base for the Southern Gas Corridor, and the more gas is extracted from our fields the more potential will be to supply our partners and to diversify the supply network which we are talking about. And of course, energy cooperation projects, they play very important role in cooperation in other areas, particularly I would mention transportation. Because today Azerbaijan is becoming the transportation center of Eurasia. East-West and North-South transportation corridors cross our countries. We invested largely in modern transportation infrastructure, Baku Sea Port, Baku-Tbilisi-Kars railroad which connects Europe and Asia, highways, Caspian shipping, airports, all that was possible because of the revenues we got from oil and gas sales. So, we redirected the revenues to the sectors which will generate additional wealth, and which will also serve our common cause. Because transportation projects as well as energy projects, they unite countries. Countries become interconnected, interdependent and everybody gets benefit. Therefore, energy security projects we see their benefit in other areas, and also, of course, successful energy development of Azerbaijan allowed us to present ourselves to the world as a reliable country, reliable partner, country which hundred percent protects foreign investments, all our contracts with energy companies are ratified by parliament and signed as a law. Therefore, investors are 100 percent sure that even one single word will not be changed in this contract. So this creates credibility and also, it allowed us to attract billions and billions of investments to other sectors of total number of investments in Azerbaijan is close to 150 billion dollars and half of it is foreign investment. It allowed us to diversify our economy to implement successful reforms, to create good business climate. According to the latest World Bank Doing Business report Azerbaijan is number 25. So, we made a tremendous success and we are among ten most reformist countries with respect to the business climate and business environment. We managed to invest huge amount of money in infrastructure, in social infrastructure to increase living standards of our people because of the proper use of energy resources and their revenues. Therefore, for us this project is of extreme importance, I am sure for all of us, and I am glad that today we can talk about success, we can talk about results, and of course today we will talk about future plans. Wish you success. Thank you for being with us.

Azerbaijan’s Energy Minister Parviz Shahbazov and European Commissioner for Budget and Human Resources, acting co-chair of SGC Advisory Council Gunther Oettinger then addressed the event.

The meeting continued with a plenary session.

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